Price War Intensifies as Petrol Retailers Undercut Dangote’s N739 Per Litre Benchmark

The ongoing competition in Nigeria’s downstream petroleum sector has taken a new turn, with several fuel retail outlets now selling Premium Motor Spirit (PMS) at prices below the N739 per litre benchmark set by the Dangote Petroleum Refinery.

Findings by LMSINT MEDIA reveal that the aggressive pricing battle has deepened following Dangote Refinery’s earlier decision to reduce petrol pump prices from nearly N900 per litre to N739 in December. Since then, importers and depot operators have raised concerns over rising financial losses, as the reduced price point has placed pressure on their operating margins.

To stay relevant in an increasingly competitive market, many fuel marketers have reportedly been compelled to adjust pump prices downward, in some cases selling PMS below their actual landing costs.

Retail Stations Slash Prices Below Dangote-Backed MRS

A market survey conducted over the weekend showed that some filling stations are now dispensing petrol at prices lower than those of MRS Oil, the primary retail partner endorsed by the Dangote Refinery to implement the N739 per litre pricing regime.

As observed on Sunday:

• NIPCO sold PMS at N738 per litre
• SAO filling stations offered petrol at N735 per litre
• Akiavic dispensed PMS at N737 per litre
• An AP filling station located beside an MRS outlet in Mowe, Ogun State, reduced its price to N736 per litre

These price cuts indicate a shift in market dynamics, as retailers compete fiercely to attract customers amid thinning profit margins.

Filling Stations Monitor Rivals Closely

It was gathered that fuel stations operating within the same locations now closely track competitors’ pump prices to avoid being priced out of the market. According to observations by LMSINT MEDIA, motorists are increasingly patronising outlets offering the lowest prices, while stations selling at higher rates experience reduced customer traffic.

This price sensitivity has forced marketers to make rapid adjustments, often within short periods, to retain market share.

Importers Sell Below Cost to Stay Competitive

Data from the Major Energies Marketers Association of Nigeria (MEMAN) shows that the average landing cost of imported petrol stands at approximately N762.38 per litre, while Dangote Refinery’s ex-gantry price remains N699.

Despite this gap, importers have still been compelled to lower pump prices in order to compete with Dangote-supplied petrol distributed through MRS outlets. Industry sources confirm that both local refiners and fuel importers are currently absorbing losses amounting to billions of naira.

Marketers Say Price Cuts Are Strategic, Not Personal

Operators who spoke to LMSINT MEDIA explained that the decision to reduce pump prices was purely strategic and not driven by rivalry or hostility within the sector.

“This has nothing to do with whether imported petrol is better or cheaper. It is simply a market strategy to avoid being pushed out,” one operator said under anonymity due to intense competition in the downstream segment.

The operator further clarified that the industry is not engaged in a conflict with any refinery or marketer, but rather responding to market forces shaped by pricing realities.

How Dangote Triggered the Price Shock

On December 12, the Dangote Refinery sent shockwaves through the industry after cutting its petrol gantry price by N129, dropping it from N828 to N699 per litre.

Shortly after, Aliko Dangote, President of the Dangote Group, disclosed that some marketers intended to maintain high pump prices despite the reduction. In response, he pledged to deploy available resources to enforce nationwide price compliance.

According to Dangote, petrol should not be sold above N740 per litre across the country for December and January. He also warned against attempts to undermine the pricing policy, stressing that marketers could purchase petrol directly from the refinery at N699 per litre.

Market Momentum Begins to Shift

LMSINT MEDIA previously reported that as more MRS filling stations in Lagos and Ogun States began selling Dangote refinery petrol at N739 per litre, motorists started avoiding outlets with higher prices. This resulted in fuel queues at several MRS stations across Lagos and surrounding areas.

However, the situation is now evolving. With non-MRS stations offering petrol at even lower prices, customer traffic is gradually redistributing, signaling a new phase in the ongoing petrol price competition.